Comment by afpx | Hacker News Reader

Comment by afpx | Hacker News Reader

Not too long ago, I had communications with Elsevier's technology team, and through that experience, I also spoke with some of their directors. Let me say that the experience was kind of mind-boggling and surreal.

My impression is that Elsevier is a company locked into the past by a couple of decades. The leadership that I spoke with seemed to have worked in publishing for a very long time. And, probably because of that, they had an old-school publishing mentality with regards to how to reach their customers, provide value, and create revenue.

I sensed that many in the technology team seemed frustrated with their leadership. They had new visions for how to evolve the publishing model to reflect the rise of sci-hub and changes in the industry. However, they were stymied by a very bureaucratic, well-entrenched, and siloed organization.

I expected that the leadership would have some strategy for dealing with this, but it seemed like they were aloof, probably grown fat from decades of near-monopoly. They had a net profit margin of 37% in 2017! Talk about a business ripe for disruption.

Elsevier has been around a very, very long time (wikipedia says 1880), and it shows. I can't imagine getting anything done within that company. So, it's no surprise that some of them are finally leaving to try out a new model. Let's hope for the best.

To be fair, there isn't really anything the leadership can do. The profit margins they are able to attain now are artificial, and anything those in the technology team can think of doing will be very unlikely to achieve those margins. All Elsevier can do is postpone the inevitable for as long as possible, and prepare for the period after that.

(Which they're doing somewhat, btw, but probably not in the way those in that team would envision. They're transforming into an analytics company, primarily by buying up others in that space. The best asset Elsevier has, currently, is money, not its technologists.)

From a networking perspective, Elsevier is like people running SS7/PSTN phone networks who are suddenly surprised that people are making voice calls between each other using whatsapp, facebook messenger, skype, etc. Anything they can try to do at this point won't help them, it's a fundamental business plan/architecture problem akin to polishing the brass doorknobs on the Titanic.

So what do you do if you're Elsevier then? Do you try to pivot? Do you try to fight to hang in there? Do you give up and spin down the company?

I really wonder, especially because they're so old (around since 1880) and so profitable (37% profit margin!)

Kodak and Fujifilm faced a similar dilemma when digital photography emerged. Fuji adapted while Kodak collapsed. But there market forces where at work.

Usually when a company faces issues like this it is very difficult to adapt because existing power structures within the company benefits from the status quo. Usually you need an external force to destabilize the existing system. It has been discussed here on HN that this is very difficult to do in scientific community because of the network effects of scientific publishing : more scientists publishing in currently established journals gives other scientists incentives to publish in the same established journals for the sake of reputation.

Reputable editors starting a new open access journal could improve this situation

I think the situation is somewhat different. Kodak was a regular market leader making regular profit margins. I'm not sure how much of it is true, but I recall reading that they invented the digital camera and then shelved it because it would compete with their own business. That implies that they could've produced it, perhaps at the cost of their analogue business, but at least with the potential of becoming market leader in this new market and reaching similar margins.

For Elsevier, that's simply unlikely to be possible. Even if they manage to successfully transform into an analytics business, the margins they'd be able to achieve would be far lower, because prices would no longer be artificially inflated.

But yes, there are external forces now pressurising them, and I think that's why they're transforming into an analytics company - to survive afterwards. But they're holding on to the old model as long as possible, because they're going to take a loss.

Kodak even began shifting, they produced their own sensors, their own cameras etc, they sold their sensors to top camera makers. They had a good plan. They didn't expect the very sudden disruption of digital cameras though.

Elsevier issue is not primary technological issue, it is issue of power and control. They profits are from being must-publish-in and must-buy-it for most ambitious scientists and institutions. Therefore they are able to charge prices that would not work in competitive market environment.

Afaik, Kodak could adapt, because its issue was technological change at its core.

With Elsevier, the issue is that institutions that actually benefited from being the only one able to pay those high prices (and thus less rich scientific institutions being disadvantaged even more) are not benefiting from that anymore and rebel.

I'm pretty sure that market forces will reach Elsevier soon enough ;) Slowly at first, then all at once.

These were almost definitely not even Elsevier employees. They were editors of an Elsevier journal, but likely were paid only a token amount for their work, and probably not even that.

The world of academic publishing is very strange, almost inconceivably so. The publishers push off most of the substantive work to unpaid academics (reviewers, editors, and of course the actual paper authors) but then charge thousands of dollars for the results. It is a wonder their profit margin is not 100%.

It's somewhat surprising to me that someone hasn't proposed a policy (for private universities) or legislation (for public ones) that require professors to be paid to review articles that are not open access.

Currently UC Berkeley is negotiating their elsevier subscription, if I were cal, I would put that sort of a policy on the table.

It's not just Berkeley, but the entire UC Library system including fairly large university campuses, making it one of the largest university libraries in the world.

Thanks for the clarification!!

Your impression is probably correct. For instance, The Economist magazine's editor is finally learning some science during his retirement[1]. Heaven knows what he thought of their tech quarterly supplement for 50+ years...

I suspect Elsevier's upper management layer is dominated by the PPE set of the Oxbridge upper class.

[1] http://blogs.sciencemag.org/pipeline/archives/2019/01/10/lea...

Great piece, deserves an HN submission all its own.

Of course, that has to be weighed against the productivity cost associated with encouraging people to visit Derek Lowe's blog for the first time...

Just don't mention the "Things I Won’t Work With" category and they'll be mostly fine

Executives are paid a lot of money, this money comes from the Elsevier business model of high subscription fees. Different business model means probably less revenue hence less executive pay. So they are riding it out as long as it lasts. They are not interested in saving the company and will move on to other high paying jobs in the end.

> I sensed that many in the technology team seemed frustrated with their leadership.

That's an understatement.

Hey, I have a couple questions I'd like to ask you @apfx, but I didn't see an email. Would you mind sending me an email at earl at apolloagriculture dot com, I'd like to hear more.

Who reads all these journals? Let alone pay for them...

mostly academics in the relevant fields, largely paid for by the institutions they work at

Institutions in turn funded by some combination of the state, undergrads, or endowments.

In Spain it is the State: there is a subscription covering all public universities for quite a few journals (at least in Maths, my job).

I really do not want to know how much we are paying for that.

In many developed countries (which aren’t huge), most or all publicly funded research universities form some kind of consortium to negotiate a big deal with Elsevier. The institutions pay for access to print journals as well as online access to the archives of current and past papers.

Elsevier (and other typical big journal publishers) operate on a model of bundling where institutions must subscribe to many journals they do not want to get access to journals which they do want.

The big negotiating consortium will go to Elsevier to negotiate. Elsevier will demand a massive price hike. The consortium will push this down, potentially threatening to not subscribe at all, Elsevier will reduce this to merely a large price hike, with maybe some undesired extra journals bundled in. The consortium will not be happy and will consider not subscribing to any Elsevier journals. They will conclude that this is too scary and potentially bad for science, and grudgingly accept the “deal.”

I understand that in Germany relatively recently such a group did in fact refuse Elsevier’s offer and Elsevier essentially continued their online access for free from fear that they might discover that they do not need Elsevier very much.

Some fields need these subscriptions more than others. For example medicine has lots of journals like this which matter whereas in mathematics or computer science most preprints go up on the arXiv and big results may be expanded on long before the paper is even published. Elsevier seems less necessary there, and the value they provide is almost entirely in the prestige of the journal name and the editors who work on the journals.

Furthermore, many funding groups (eg governments) are requiring more and more open access for published research they fund. One can sometimes pay Elsevier a large fee to make a paper published there open access so they can potentially be paid almost entirely for their current assets (a journal name and board of editors) and not for any services they provide (like printing or typesetting)

Every single scientist in the planet, probably.

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